Ford's Dearborn, MI plant, 1928. Photo: Hulton Archive/Getty
For the first time in a decade, the U.S. worker shortage is so pronounced that it is visible in suppressed aggregate hiring numbers, economists say, and it will probably become worse.
Quick take: Ahead of Friday's new U.S. jobs report from the Bureau of Labor Statistics, ADP, the payroll company, said the economy produced 178,000 new jobs in May, which economists said is strong but muted compared with demand.
- Mark Zandi, chief economist at Moodys Analytics, said the number could have been higher if companies had been able to hire as many workers as they wanted.
- "Job growth is constrained for the first time in a decade," he said in a conference call this morning.
- A record number of positions are unfilled in manufacturing, transportation, healthcare, financial services, leisure and hospitality businesses, Zandi told Axios in a followup exchange of emails.
All of this has occurred without the full effect of the $1.5 trillion tax cut, economists said.
- In good news, wages for young, new entrants to the job market surged by 5% in April, Zandi said.
- That is almost twice the pay growth for all private-sector workers, which has been at about 2.6% since the end of 2015, said Martha Gimbel, research director at Indeed.
Yes, but... the Kansas City Fed, in a report earlier this month, said wage growth overall continue to trail other recent economic recoveries.
"By late 2005, roughly four years after the end of the 2001 recession, year-over-year wage growth had surpassed 3%, and it reached 4% shortly thereafter. In contrast, nearly nine years after the end of the Great Recession, year-over-year wage growth has still not reached 3%."— Kansas City Fed